>> today i spoke i think at the african economies are performing better today. 6 of the 10 fastest growing economies are in africa. the period between 2011 and 2015, it is projected that 7 out of the 10 fastest growing economies will be in africa. but why are we there. because of strong -- pursuit of sound economic policies. also, the pursuit of sound political policies. there is -- democracy has taken roots. governance is enshrined.

there is stronger commitment now to fight advices in society -- corruption, drug trafficking, drug abuse, whichever. it is more respect for human rights. there are fewer conflicts today. that doesn't mean except, of course, there are a few hotspots. when you look today, what is happening in the conflict areas in africa, they don't compare it. so i say unfortunately this is the good story which is not being told so i was appealing to those journalists, please, tell the other story. but i was given the same example. now there is ebola. so the whole of african continent is being perceived as if everywhere everybody is suffering from ebola.

>> i don't think that's true. that's not true. i don't think. live now to the national press club in washington, d.c. where the progressive policy institute is hosting a discussion on wireless technology. some of the challenges facing the fcc. introductions right now by will marshall of ppi. >> this is a highly technical, somewhat arcane area of public policy. it's shrouded in impenetrable jargon about gigabytes and lte. and let's face it, how you allocate the electromagnetic spectrum is not exact lip the stuff of grand political narrative. it's not nearly as compelling as ebola or the war on women, but it's really important and that's why we're here today. as larry downs, our friend, is here today has written, despite all the sound and fury that surrounds the net neutrality debate, questions like spectrum shortage and other capacity shortages in the mobile space are probably going to have ooh

bigger impact on our ability to improve and expand the mobile broadband ecosystem. so ppi has laid heavy stress in our work on protecting the environment for digital innovation. we think it is an urgent political issue. it ought to be debated and talked about. it is really key to a strategy which we think is the most important thing this country needs for putting america back on a high-growth path to shared prosperity and rebuilding the middle class. that strategy ought to start where we're showing real success. it ought to build on our unique strengths and comparative advantages as a country infusing science and commerce. michael mandel, ppi's chief economist who you'll hear from in a minute, has really documented the rise of what we call the data-driven economy propelled by plasive private investment in broadband, fixed and mobile, and by furious competition. he's measured the number of app jobs created just since 2007

alone. it is really a remarkable story and is now working on a road map -- policy road map for getting to a 6g world and beyond which i'm sure he'll talk about shortly. but the main limits on the expansion of the mobile ecosystem lie in the realm of regulation. the redeployment of underused spectrum, approval of cell towers, where we site antennas. these kinds of questions. in a terrific report for ppi last year, we examined the question of spectrum policy and spectrum auctions. they argued in this report spectrum policy should be guided by the desire to maximize investment in next generation wireless rather than maximizing the number of wireless providers. the public interest lies in the former more than the latter. i want to give a special thanks to hal, a senior ppi senior fellow and colleague. the speed of today's digital

innovation poses huge challenges for regulation. account public sector keep up with what's going on in the broadband space? can government embrace regulatory humility instead of trying to preempt bad things that might happen but might not happen. those are the kind of questions we're going to grapple with today. we're very fortunate to have as our key note speaker roger sherman. obviously the federal communications commission will be the cockpit of activity for these issues. so that's why we're so happy that roger could be here today and talk about the fcc's ideas for meeting the mobile moment. roger's the chief of the fcc's wireless telecommunications bureau. he's previously democratic cheech counsel on the house committee on energy and commerce and was the democratic staff director for the subcommittee on communications and technology. after working on capitol hill as an aide for both senator allan

cranston and for henry waxman, congressman waxman, he spent ten years as a director of regulatory affairs and a senior attorney at sprint. so roger's somebody who's worked on both sides of this issue and is uniquely qualified to guide us through the complexities of mobile policy and regulation. without further ado, thank you for joining us, roger. and over to you. >> good morning and thank you so houser and will and ppi for the invitation to speak to you today. it feels like a lot longer but i've been at the fcc for a little less than a year. and in commission time, this is barely a blip on the radar. but under chairman wheeler's leadership, we've been moving at a very fast pace, taking on many, many complex issues. so in the wireless bureau, by way of example, we've had our hands full with the h block auction, aws3, the incentive

auction, mobile spectrum holdings, infrastructure, 3.5, spectrum frontiers, part 16, cellular licensing reform, competitive bidding rules, joint bidding rules, data on planes, competition policy, it is a long list. i suspect that the pace won't being letting up any time soon. while we're busy working on these issues, the wireless industry continues to evolve in new and exciting ways and sometimes challenging ways. but when we look at industry in the regulatory landscape we just don't see challenges, we see opportunities. that's what i want to talk to you about today, is opportunities that we see from the wireless bureau and how those fit into our agenda at the bureau. more specifically, we see opportunities to remove barriers to the deployment of wireless infrastructure. we see opportunities to make more spectrum available in new and innovative ways to meet consumer wireless broadband depland demands and we see opportunities to promote and protect the competitive marketplace, opportunities to stimulate and

promote innovation in the industry and services devices threat works as well as regulation and policy. policy innovation is a really important thing we are trying to focus on as well. these opportunities advance and sync up with the wireless bureau's overarching strategic goals. we put them into three categories -- promoting spectrum availability and infrastructure deployment, protecting and promoting competition, and supporting and stimulating innovation in all forms. of course when i say "we," i'm not just referring to the fcc staff or the agency itself. the effort we are undertaking requires engagement and collaboration of stakeholders from industry and the public interest community. many parties have an important role to play in making sure the u.s. continues to be the world leader in wireless. in fact, weep often challenge people that come before the bureau to approach issues that they're s are advocating on as opportunities to work collaboratively to find solutions. one quick observation in my relatively short time at the agency, i have come to appreciate just how refreshing

it is when you have advocates come before you that offer reasonable solutions to problems. one that -- solutions that benefit their interests, to be be sure, but not overly protective, defensive or aggressive. that the set of best way to advocate for the agency. it was the best way to advocate before the committee on energy and commerce but i've noticed it even more acutely at the agency. of course not everyone comes in to propose solutions from this perspective. so we sometimes see some interesting or even strange advocacy. i'm not going to call anyone out here, but maybe some time over a couple beers. but fcc staff do notice when parties don't recognize other perspectives or push too hard for their particular outcome with no consideration for other sta stakeholders. one point of clarification -- you shouldn't assume it is big companies always pushing for the maximum position. there's no monopoly on that.

last year some have embraced the challenge to take on new problems. please take the opportunity that i'm going to address some of the issues today, take some of these opportunities to find new approaches to problems and challenges facing us. work together to find solutions and instead of just highlighting problems, offer concrete, specific suggestions. we have better outcomes when the commission doesn't have to adjudicate between two or more legal, technical or policy positions. when stakeholders work cooperatively with us to find solutions, everyone is better off. the last thing you want is to have a bunch of bureaucrats making the decision without the input of knowledgeable industry and public interest voices. let's now turn to the bureau's areas of focus. spectrum, infrastructure deployment and competition. in each of these areas we can find examples of successful collaboration as well as opportunities for the future. so first let's talk about spectrum. in the area of spectrum there are great examples where parties have seen an issue as an opportunity and worked together to capitalize.

take the hblock for example. this 10 mega hertz of spectrum in the pcs ban was in the commission's inventory for years because of what was perceived to be an unsolvable technical problem. but talented engineers in the commission and out in industry worked collaborative to work out technical rules building on advancements in technology that would make the ban usable and they found a solution and value followed. earlier this year we were able to auction the h block raising $1.56 billion to help fund first net. there are other examples. aws3. in particular 1755 to 1780. many were very spectacle that this spectrum would ever be available for commercial uses. people in the industry and government have been working on this problem for years. and i saw this from my time on the hill, there was -- there are often periods of time when there was no hope. but due to solutions-based thinking at the department of defense and ntia, the fcc, other agencies, industry, and in

congress, in just over two weeks we're going to begin auctioning 65 megahertz of spectrum in this band. our largest auction in over five years. mark it on your calendars. november 13th. we're very excited. building on these successful efforts there are other opportunities to find solutions to make other spectrum bands newly available for wireless. broadband. the 3.5 gigahertz proceeding is an opportunity to explore a new way to unlock spectrum through innovative regulatory an technical approaches. if we're successful, in capitalizing on the potential of the band, it will open up prospects for expanding access across other federal bands for new civilian uses. parties still need to come together to help drive this solution. a little over a week ago, the commission adopted a notice of inquiry that embarks on another new and exciting opportunity, one that will determine whether and how we can make spectrum much higher up than the spectrum chart available for mobile broadband. we are talking about bands above 24 gigahertz. through this new proceeding we'll examine the state of art

and technologies that will make these higher frequency bands useful for mobile. there are many names for you this in initiative. in the bureau we call it spectrum frontiers. others talk about it in the context of 5g. or as the chairman noted after the open meeting at which this item was adopted, this is a quote, "i don't care what they call it, millimeter wave, 5g kumquats. i don't care. whatever they call it, it is an important step in the spectrum's next efforts." we strive to create rules to allow the market to determine the technology deployed in a particular band. it is also a new opportunity for a fresh solutions-based approach. everybody's encouraged to participate. this is really the ground floor and it is really exciting opportunity for all. of course we can't forget about the first-ever incentive auction which is a huge opportunity to utilize an innovative approach to freeing valuable low band spectrum. the auction is slightly delayed

but our work is by no means stopping or slowing. we are developing a common public notice which will seek additional input on the final procedures for the auction. that should be coming in the relatively near future. as we make more spectrum available we also need to make sure that providers of all sizes, including minority and women-owned small businesses, have an opportunity to participate in spectrum auctions and in the wireless marketplace. that's why the commission initiated a rule making to take a fresh look at its competitive bidding rules for the first time in eight years. eight years is a lifetime in the wireless industry and we have an opportunity now to revisit and update our rules to support small businesses and maybe take advantage of some new business pl models. spectrum is only a part of our frame wok framework to expand wireless. we also need to foster a competitive marketplace. that's where infrastructure comes in. i've made infrastructure a key priority for the bureau since i joined the commission staff last year. i spent some time in the private sector and i have to confess i

have a private secotor history n this area and a special appreciation for how difficult it is to build a wireless network once you've acquired spectrum to deploy. nobody really wanted to talk about it, it is not an exciting issue. some of it is real estate and some of it is land use and zoning. but it is critical to allow companies to deploy spectrum and make it available to consumers. so making progress from this areas has been particularly satisfying. in our most recent activity we saw an opportunity to evolve the old regulatory model to meet the infrastructure demands of modern wireless networks. think small cell. i'm pleased earlier this month the commission unanimously adopted a report and order that will reduce the cost and delays associated with wireless facility collocations. the report and order takes critical steps to promote the deployment of wireless infrastructure necessary to provide the public with the ubiquitous advanced wireless broadband services it demands. more specifically, we updated

and tailored the manner in which the fcc evaluates the impact of proposed deployments on the environment and historic properties. we adopted rules to clarify and implement statutory limitations on state and local governments in reviewing infrastructure siting applications, including for the first time a dean granted remedy if a state or local government fails to act on an eligible facility within a certain period of time, in this case 60 days. we codified a narrow exemption from the process for temporary powers. the great thing about this item is that it's pro-environment, pro-local government, it's pro-historic preservation but it also takes into account new realities in wireless deployment. taken together, these steps are all going to help deliver more wireless capacity in more locations to consumers throughout the u.s. this is not the only thing we're doing. we also took steps to streamline our part 17 rules which deal with tower lighting and marking. we're also taking steps to try

to expedite facility siting going forward and also bring a number of towers that are out of commission because of their regulatory status into compliance so that they can be available for collocation. this is another example where stakeholders saw the opportunity and worked with us to develop reasonable solutions. in fact, stakeholder engagement in this effort was superb and all parties came forward to constructive ideas to solve problems. we really would miss our spectrum opportunities that i talked about earlier if we don't seize these infrastructure opportunities. finally with all this opportunity seizing, it will fall flat if we don't push to promote and preserve competition. i'm sure you've all heard chairman wheeler speak about how important competition is to him and how competition is a consideration in everything we do. so we're always looking to pursue policies that promote and preserve a competitive marketplace into the future. we are very encouraged and the chairman has spoken about this. he's very encouraged by recent

announcements that confirm industry is focused on competing in the marketplace with some providers reducing prices and offering more consumer friendly policies than ever. from our perspective this is a good thing and we expect it to increase consumer welfare, drive innovation and foster further investment. one of our major successes in promoting and preserving competition in 2014 was the mobile spectrum holdings report and order adopted at the may open meeting. in the msh order we revised our spectrum screen to account for the spectrum currently available for mobile broadband and created a market based reserve of up to 30 megahertz of low band spectrum that will be auctioned in the 2016 incentive auction. this reserve will create the opportunity of providers without significant amounts of low band spectrum to get the spectrum they need to compete. we've heard from many providers, the largest and the smallest, that they want this spectrum as soon as possible. as the commission noted, there are significant risks of anticompetitive behavior in the downstream wireless market and the agency plans to vigilantly preserve and promote competition

to that end. so along those lines we're going to carefully consider transactions under our revised spectrum screening including an enhanced factor analysis to consider concentrations of sub1 gigahertz spectrum. we're going to look for opportunities to promote and preserve competition in our rule makings. as you all know been competitive mobile marketplace drives investment and innovation, access and deployment for all end users around devices. we are also working to address questions related to the application of the commission's roaming rules especially as they relate to data roaming. there are multiple petitions and formal complaints pending before the agency at this time. given the importance of roechling for competition in the current marketplace, commission staff is actively reviewing what is in front of us. finally, no discussion of competition would be complete without mention of the open internet proceeding. we're looking closely at what consumer protections are needed to preserve an open internet, not just for fixed services but also for mobile wireless services. as part of that review, we're carefully considering the implications of mobile network

capacity constraints. we understand that wireless is different and for those of you who are at the mobile roundtable, i think chairman wheeler made clear he understands that wireless is different. but what we're actively exploring is what that means in practice and whether these differences can be addressed through a definition of reasonable network management that applies to mobile providers. we're also looking at questions about whether the commission could interpret the statutory definition of commercial mobile service to apply to a mobile broadband service. bottom line -- as noted in the blog posted yesterday by john sallet, myself and julie veech, we welcome additional thoughts on all these topics. now is the time to weigh in. it is a very business time at the wireless bureau and i hope it is clear that we're very focused on seizing opportunities to promote spectrum availability, frequent tinfrastd to promote and protect access. we want to do everything we can to support and stimulate innovation in all forms so that the united states can continue

to be the world leader in wireless. thanks so much for your time and consideration. appreciate it. zblm if t . >> if the panelists can come up now.>> if the panelists can com now. >> well, thanks a lot, roger. thank you all for coming. i want to thank ppi for hosting this event. i particularly want to thank the folks behind the scenes who always do the hard work to get these shows going. cody's sitting in the front row here. steven is i think it back here. sloan, if she's here, i appreciate everything you guys

do to put this together. now it is time for the expert panel. what many of these panelists have in common is that they have written papers on wireless issues. that's drawn our attention and that's why they're here. we're going to give them an opportunity to talk about some of their research. all of their research is available on ppi's webpage. what else is available on the webpage are links to recent ppi shows. i'm particularly proud of the last two. if you haven't seen them, i think this is must-have policy watching. we had one on interconnection with ruth milkman gave the keynote that was just fantastic. can you watch it on our website. then we had one on the net neutrality debate where i thought we had reached a consensus, but it seems like -- we reached a consensus but i guess that didn't put an end to the debate. but i do encourage everyone to go back and check those out. they're fabulous shows.

i'm very excited, too, today to have c-span3 covering the event. i called my mom and told her about it and she asked me who was on c-span1 and 2. as a mom, its's just going to take some time. the purpose of the panel here is to explore some interesting wireless issues that's facing the commission. but before we diver i in, i'll questions of the panelists. if they go along with the premise of my questions, they'll stick with the softball on this list. if you want to fight with me, we're going to go to the hostile questions. >> i think we should just start with the hostile questions. >> a tip for the audience, too. i really want to lean on the audience heavily for questions here. i don't want to be responsible for filling up the air time. so i want to actually go to the audience about 20 minutes in. i find it's very boring just to sit back there and listen for an hour straight. i want to go to the audience about 20 minutes in so be thinking right now about tough questions that you want to put to the panelists.

i think with that, let me just quickly introduce the panel. this is an all-star wireless lineup. we have mary brown, director of government affairs from cisco. she is the senior director for technology and spectrum policy in cisco's washington government affairs office. she leads cisco's global public policy agenda for wireless technologies and spectrum policy. during her career she has worked, among other things, as staff lawyer and manager at the fcc. mary holds a jd and masters of science in telecommunications from syracuse and we will be putting both of those to use today. michael mandel, chief economist, progressive policy institute. he also holds an appointment as a seen yonior fellow at wharton mack institute for innovation management in the university of pennsylvania. prior to joining ppi, he was, among other things, the chief economist at "business week" for 21 years. he holds a ph.d in economics

from harvard university. it's fairly impressive. almost as prestigious as having a ph.d from johns hopkins. roger aetner, founder and leading animal cyst and recon analytics. a leading expert on telecom, particularly the wireless communications industry before founding recon analytics, roger was senior vice president and head of research and insight for the telecom practice of the nielsen company. think irv's heard of that. one of the largest consumer market research providers in the world. he was also senior vice president of the communications of iag research and vice president of telecom for ovum. thanks for joining us, roger. finally, peter, sitting closest to me, a peter is an expert on the capabilities and evolution of wireless technology. peter is executive director of the portable computer and communication organization -- >> actually now it's called wireless technology association.

>> thank you. and peter, importantly, has a master of science in electrical engineering from stanford. very fancy and we are go fog lean on that heavily particularly with my first question. let me begin. i want to tell all the panelists, even though each question is directed to one panelist, i encourage you to weigh in just so that we can get some conversation going. but let me start on the issue of the day. net neutrality. we're going to talk about how this relates to wireless. peter, let's start by putting that engineering degree to work. advocates of strong net neutrality want to ban deals where edge providers pay for priority because they're worried that everyone else will necessarily get a lower quality of service. if this were true, this would be a very legitimate concern because that could start to mess with innovation. i want to ask you, does priority for a given edge providers

necessarily entail a sacrifice of the quality of service for other edge providers, or is it possible to introduce priority without degrading the quality of non-prioritized traffic. >> well, it depends on whether it is a zero sum game or not. and from an engineering perspective, i don't view it as such. there may be some scenarios where you do have absolutely constrained capacity, and that tends to be much more the case in wireless networks. but certainly in wired networks, you have plenty of capacity, and so prioritizing certain pipes in the system does not necessarily have, and a lot of cases will not have, any adverse effect on other pipes. >> okay. so, mike, as an economist, i want you to think, in light of

peter's answer, which if i heard it right, it doesn't necessarily entail a sacrifice, that is, there could be a priority deal that is truly, in our lingo, parado improving, there are no injured parties, and there are actually going to be two or three beneficiaries to the party. does it make sense to have a blanket prohibition on paid priority or should we assess these deals on a case by case basis? what does economics have to say about this? >> hal, that's a good question. let me take a step back and give a bit of a bigger picture. we are at an unusual moment macro economically where there is a very large pool of investable funds out there and very low interest rates. so it's -- roger mentioned about investment. right now what we need to do is we need to set up policies that create investment incentives for investment while the money is so cheap. paid priority by raising the price and raising the quality at the same time can do that. so that's really the framework

we need to look at this as. what can we do to create long lasting incentives for investment. if you don't have paid priority, you're basically producing a commodity product. and we know that producing -- allowing higher quality products will bring in more investment. and potentially produce more competition. >> right. so then in the choice between a blanket prohibition and case by case,ky get you to commit one way or the other? >> oh, absolutely. a plank kblanket prohibition woa terrible mistake from the big picture point of view. because if what we want is to create both more investment in capacity and more room for competition, what we have to do is we have to create a structure in which people can say, okay, i can earn back that money that i'm investing. if what you're doing is putting on blanket prohibitions on what

providers especially new providers can do, then what you're doing is you're blocking off the possibility of somebody coming in creating a new network, a higher end network, that potentially could create a lot more competition, a lot more investment than we have flonow. want to get me on record? it would be a bad idea to have a blanket prohibition. what we've seen in terms of broader economics is that allowing a differentiation of products is going to create a lot more investment. >> roger, go ahead. >> will the, a blanket prohibition would basically mean that we're freezing innovation and progress in the way business models are evolving. may there be deals that might be bad? yes. but then we should address that on a case by case basis. but we should allow every participant in the value chain and in the marketplace to innovate not only technically

but also around business models, around new innovative ways to provide services to consumers and not just say, no, it's only this way or the highway. >> i think we should think about policy at this point in a longer term sense rather than a short term sense. those produce a short term versus long term produce different outcomes. >> now mary, a question for you. we're going to move over to the wireless base. there is a lot of talk among other ctia that they want a different set of net neutrality rules for wireless ips and whatever gets applied to wireless isps. what's the answer? does a different market structure -- we have four-plus wireless providers in each market and two-plus wire line, or different capacity constraints dictate a different

set of net neutrality rules as the fcc did in its 2010 open internet order? >> well, cisco supported the 2010 order. we thought that the distinctions that were made there by the fcc with respect to wireless made a lot of sense to us. we didn't really base that on the market structure so much as the basic differences in technology. wireless carriers are dealing with end users who are moving around, they're dealing with capacity constraints that vary by time of day and physical space. by events that are happening, whether it's the world cup or the world series. and so these have a different impact in a capacity constrained wireless world relative to wire line. so we thought the 2010 decision hit the right notes and have been urging the fcc to stick to

that as it contemplates the sort of next wave in the wake of the court decision. >> peter, go ahead. >> i'd like to add to that. i've heard mention that there is a recognition that wireless and wire line are different. i don't know if the average person looking at this knows how different they really are. so let me just provide a little bit of insight into that. one fiber-optic cable has 2,000 times the capacity of all mobile broadband spectrum. right? we're talking orders and orders of magnitude difference in capacity alone. wireless networks are extremely dynamic. people's connections depending on whether they have a good signal quality or poor signal quality, they're at the cell edge, center of the cell, that can determine their

capabilities, again by at least an order of magnitude, if not more. people are mobile. they're moving in and out of coverage areas so the whole environment is extremely dynamic. then also wireless networks tend to run much closer towards the limits of the capacity than wire line networks. that means that how they're managed is fundamentally different. and then you can also look at what's happening with lte and some of its capabilities such as its quality of service architecture. operators in the midst of a transition to voiceover lte, which means packetized voice, voice over ip over wireless. and unless those packets and the signaling or controlled traffic are handled with higher priority, voice just won't work. and there's nothing comparable happening in wire line. i just want to really emphasize that fundamental distinction

between the two types of technologies. >> what i'm hearing perhaps is that they should be treated differently, there should be a difft digger challenge. and the only way you can do that in either way is through compressi compression. so the deal with google involved high compression. and i'm sure if anybody would have agreed to compress this. youtube is just at that time was the biggest bandwidth consumption. now it's probably netflix. it was able to do that. so the deal that metro did here brought video to people who otherwise could not have gotten video at all. so i think it is better to bring some water to somebody who's thirsting in the desert that no water at all. >> i like that analogy. now i was going to do a follow-up.

but go ahead. >> rather than thinking about this as paid priority, think about it as quality differentiated service. quality differentiated services are both better quality services and also lower quality services. lower quality services that you can perhaps charge less for and are accessible to people that are lower incomes. higher quality services are ones that are -- produce a wider range of services and perhaps cost more. and i think if you think about the economics of it, you end up with both more revenue flowing through the system and also higher consumer welfare. if you allow the whole range of products rather than just sort of squeezing it down to one. so in that sense this was a good thing. >> okay. so my follow-on question will go to the audience for a few questions, then we'll come back to me. it is conceivable that certain content providers such as facebook and google -- there's other big ones as well -- might want to subsidize broadband access for low-income users. they might be able to monetize those eyeballs in such a way

that defray some or all of the cost of the subsidy. so in general my question -- there is for the entire panel -- is should the fcc step in between those deals and bar any sponsored data plan in which a large content provider subsidizes the end user's broadband access price. anyone want to take that? >> i think one of the goals that we have is bring broadband and broadband services to more people. and if we have -- and money is certainly an obstacle. and if we have companies that are willing to sponsor the data to bring access to more people, we should let them. it's a win for everybody involved. otherwise, many users would not be able to use it to that extent. and so with that, it absolutely is a positive thing. >> anybody else want to weigh in

on that? >> yes. i think we should think about this in terms of general principles. and this is actually important as we think about any potential revisions to the broader telecommunications legislation. we have two principles, one is maximizing investment, and the other is equity and equity for consumers. in this case, if we're opening up access to more people, it is a good thing. but i would add on to what roger said, we should think about this in terms of its effect on investment as well. so we don't just want to subsidize. we want to make sure that part of the incentive is more investment to create better service possibilities for the people at the lower end of the income spectrum. >> with that, peter, anybody else want to go -- roger. >> we have to recognize that a lot of the companies that are providing services over wireless

are benefiting quite handsomely. you know, the average google user generates more than $40 in revenue for google. the average facebook user generates more than $10 of revenue for facebook. so for them, the users love to use these services. they get it for no direct payment. and it also benefits the companies, and if they would like to stimulate usage, for them to share some of the revenues that they make from users using the service, they would benefit, too, as their usage would go up. >> i'd just like to add that my view is that we're in early days of mobile broadband. this is going to be a multi-decade unfolding and it's hard to predict exactly what kind of plans, what kind of

capabilities, what kind of applications are really going to drive this industry. so any constraints on the evolution i think are likely to have adverse consequences. i think we should experiment with all different kinds of plans, different ways of making content and broadband services available. and that will involve a lot of different types of pricing models, service models, and i am all for encouraging flexibility in this area. >> we've been going for about 45 minutes now. so i wanted to see if there were any questions from the audience just to kind of break things up. we've got one back there. if you could perhaps introduce yourself when you go, it would be nice. >> sure. less crowded and therefore cooler other here.

ethan handleman from the national housing conference. i want to follow up on the last question you just offered to the panel and ask what opportunities you see either for private companies or through changes in fcc policy to make meaningful broadband access more available to folks of low and mod cat income especially in affordable housing. not just the pipeline to the apartment or to the house but also the equipment and technical support that makes that access meaningful for job opportunities, education opportunities, as well as entertainment, which we know creates revenue. >> i'll start. i think mobile is the answer. right? as we look around the globe, the way that most of the world's population is connecting to the internet now is through mobile devices. and i would suspect that as we march forward that trend is going to continue. certainly the embrace by lower

income populations in the u.s. and mobile technologies is very firm and growing. and as we watch the sort of costs of the equipment, the costs of the connection drop, those are all good things. i think a competitive market in this space is important. right? to keep service prices down. but to me, the answer relies primarily on this sector, this sphere, to try to bring as many people possible into the broadband space. >> i think one of the things we also to recognize is that minorities, african-americans and hispanics, are leading in the wireless revolution and have higher percentage of smartphone ownership than caucasians. so a lot of the minorities have already made that jump.

we just have to help to make it more affordable. >> we had a question in the front row as well. >> you talked when you first hit the premise about net neutrality about discrimination, particularly for new start-ups. yet you then came around and talked about on the video side there are rules and whether, you know, the new provider has to prove discrimination or whether the isp has to. and in the program side of that, which you referenced, those discrimination claims are very hard to prove for a small start-up. i'm thinking about that edge provider out there who is suddenly looking at its terms or conditions of trying to get to a customer, the burden on that mom or pop start-up to come out and say, okay, we can prove there's discrimination out there. it's very hard when you have goliath versus goliath, i don't

really care. if it is facebook versus an isp, they both have enough lawyers and smart minds around. but for start-ups that's harder. i'm curious. you had put the premise forward. you have any thoughts on how to works. true, if net neutrality helps the new guy, he won't have a sophisticated or large antiprice backing them, how might that play out. >> sure. >> it all depends on how we set up the evidentiary burden. right? we could even have burden shifting as well. one very low threshold or low cost, you wouldn't even need to hire an economist or a fancy lawyer, is just a demonstration that your quality of service was degraded for declining the priority offer. at that point perhaps burden could shift over to the isp to have to defend why the treatment was disparate on efficiency grounds. but it all comes down to how you design the ground rules. if you make it excessively

burdensome to win a case, if it can go on for five years, then i would absolutely sympathize. which there are infirmities in how the video side is set up. it is not ideal. it's not ideal. but that doesn't mean that that's still not the right answer. right? we're starting from blank slate and we can design the rules to accommodate these concerns. are there any other questions before i was going to go back to the -- oh, we do. let's do like okay. how about larry. larry, why don't you go, larry downs is in the house. thanks. hi, larry downs, georgetown center for business public policy. i'm still making my way through last week's infrastructure order. i'm hoping some of the panelists have gotten further than i have, and i'm curious if there are any particular items in there that you felt were missing, if there are sort of still big things that you think the fcc could do to greatly accelerate the

deployment of infrastructure that weren't in the order, that should have been or that should be in future orders? >> i think we've already been through it. anybody have ideas? >> not enough detail. >> what about ideas to encourage infrastructure? >> if you sort of look out -- one of the things we were talking about later is looking further out into the future. it's very important to encourage infrastructure investment as much as possible. it's very complementary to spectrum. and so, anything that's done that makes the investment in infrastructure easier is a real improvement, especially as we move to small cells. so, i think that the conversation going forward is going to turn out to be more evenly balanced between spectrum and infrastructure than it is now. >> well, i thought it was one of the most interesting data points in that order was not 60% of

voice traffic and 70% of internet traffic is happening in building. and one of the cutting-edges of case law at around cell-side placing is around in-building coverage. and i hope that this order will help significantly in that endeavor for wireless carriers to -- that the burden that they have to meet, or that they -- that outdoor coverage is not alone. because a lot of the municipalities are blocking cell-side building by saying oh, you have outdoor coverage, it's fine. well the reality of -- of how americans are using wireless is that they use it indoors. and so, we need more cell sites. and i think this -- you know,

this report and order will help stimulate investment by really recognizing how much happens indoor, and give more help to carriers to build the sites -- to manage indoor coverage. >> i think there was a question over here and then we'll go back. we'll go back to the panel. >> jared weaver with the high trek spectrum coalition. we talked a lot about access to wireless services, and the demand from all the great things that providers are doing but we haven't really talked about spectrum. that's one of the things that we could do to reduce costs, or keep costs as low as possible over the long-term, is to get more spectrum in the pipeline for wireless carriers. we all know demand is skyrocketing. wanted to know if any of the panelists have any creative ideas on how to gain access to

more government spectrum, how to transition commercial spectrum that's out there into usable spectrum for mobile carriers. >> it's a great question. how do we get other government agencies to give up the spectrum that they're holding? >> well, i think in a sense -- you know, a lot of nudging, and incentives would be a good way. you know, there's a lot of inertia happening. you know, with -- you know i think the aws-1 spectrum, there was one case where nasa was using the spectrum twice a year for a launch. you know, and around cape canaveral and for about ten minutes during the course of a year. and for that we blocked it out nationwide, 365 days a year. so there's a lot of inertia. there's a lot of oh, i can't

afford it. but when you actually take a spectrum analyzer and hold it out and look at where is actually usage, it's commercial mobile radio service, and wi-fi. other than that, your spectrum analyzer will show virtually no usage. other than here and there, a little bit. so, there's a lot of spectrum that is used 99% of the time. not at all. and if we incentivize people, and nudge them, you know, i think we can clear a lot of spectrum. >> there's a famous -- oh, sorry, mary, did you want to say something? >> i just wanted to say i think we're about to start the aws-3 auction. and i think it's worth pausing for a moment to consider that the combination of the congressional policymakers, the fcc, and leadership at the

department of defense has enabled that auction to go forward. i mean, because that band was stalled for years and years. and it took some nudging and creative lawmaking with the commercial spectrum enhancement act in order to pay for the changes that dod is going to be incurring that enable that to go forward. and it's it was a tough set of issues. it required a long process of the department of commerce to figure out, you know, what can move and what couldn't move. but at the end of the day, i think we've gotten to a place where that band is going to be substantially cleared, and put in service for mobile broadband. which is a fantastic achievement. so we all ought to collectively pat ourselves on the back and applaud our friends up on capitol hill. >> and the absolutely critical thing about aws-3 is not necessarily that we're getting 65 or 80 megahertz of spectrum. but aws-3 is the only spectrum

band that we have global roaming on. it's the only piece of spectrum where everybody on this planet has been able to agree on it. so that otherwise we have 55 or more different bands for l.t.e. but this is the only one that works globally that will allow americans to travel overseas, enjoy lte service there. otherwise there's like thousands of permutations where you may or may not be lucky when you go overseas so that you can actually access the lte network that people have in that country. >> let me just add one thing. the way you think of this as, you should think of this as an improvement in global consumer welfare. okay. because what's happening is that this unused spectrum, or underused, is being transferred to use by consumers both in the u.s., and around because of this -- because of the roaming,

around the world. you can actually value this probably in billions of dollars. >> when i asked how we're going to get agencies to give it up, a very famous economist in the house, stan besson said we should pay them. it's funny that all economists think the same. this is why we don't get invited back to the cocktail parties. [ inaudible ] talk about getting government agencies to give up spectrum but they never talk about paying them to do so. and if there's nothing in it for them, i learned this through graduate school, they're likely to do that. i have a question if i may? >> yeah, sure, go ahead. >> since i have the microphone. this is about unlicensed spectrum. everybody talks about unlicensed spectrum as a wonderful resource. but economists think of that, have a name for this, a common property resource. and this great increasing demands on it over time, i see these charts showing larger and larger demands over time, should i worry about potential inefficient use of unlicensed

spectrum because of the fact that it's a common property resource and therefore no one owns it? >> you're already worrying about it, right? >> you're already worrying. >> stan, you actually -- you actually anticipated the very next topic on my list. let's get into it right now, unlicensed spectrum. i know there's questions that are on that side. let us knock out unlicensed spectrum. i promise we'll come back and take care of these. this is my second topic. i was reading a piece, this is for mary, on stan's point, there was a -- whatever came, mary, i read about this in "the washington post," one of my favorite writers, february 2013, was touting this new super public wi-fi network as being quote so powerful and broad in reach that consumers could use them to make calls or surf the internet without paying a cell phone bill every month, end quote. when i read this, i got very excited, because i don't like to pay for cell phone. >> it was a breathtaking statement, yes. >> so i don't want you or cisco to be standing in the way of my

free cell phone service. i mean, why isn't this the greatest thing since sliced bred? >> as best i can tell what that article was referencing was the initiative led by proponents in the tech sector, not cisco, to champion unlicensed use of the television white spaces or the television guard bands that will be left once the voluntary incentive auction is done. and this grew out of then fcc chairman janikowski's labeling of that unlicensed use down in the tv bands as super wi-fi. the irony being it was neither super, nor wi-fi at the time he said it. so for those of you who are not steeped in the technology, wi-fi is a technology that began in the 2.4 gigahertz band many years ago. the unlicensed famous unlicensed junk band.

has then also now migrated into the 5 gigahertz band. and in fact the latest iteration of wi-fi technology known to the geeks as 802.11-ac is exclusively designed for the 5 gigahertz band. why is that? because the technology it uses requires very wide channels to deliver very high through-put. through-put that's in excess of a giga bit per second. how wide are those channels? they're 80 megahertz wide or 160 megahertz wide. now that is super wi-fi. right? that's the super part of it. the tv bands, they're not unuseful bands. and one can certainly as a technologist design a radio system for them. but the problem is, you don't have very much unlicensed spectrum available in the big, what we call the big nfl cities. you may have just six megahertz. or no megahertz.

and so what do you do with 6 megahertz of spectrum in a technology whose latest iteration is 80 or 160 megahertz. there's a little bit of a mismatch. and so while i read the article with great interest, i was reminded that back in 2006 when the fcc issued its very first report and order on tv white spaces, my good friend then-commissioner robert mcdowell proclaimed that we would all see consumer devices in the tv white spaces bands under our christmas trees in 2009. and i look every year and i'm still waiting. >> aw. >> i'd like to add to that. which is, in my view as an engineer, i view unlicensed and wide air as mutually exclusive. they're incompatible with each other. the reason wi-fi works is that you have very localized coverage

areas. you put up an access point in this room, and then if you need capacity, or coverage, you put up another one in the next room. and if they interfere with each other, you figure out some band plan or, in fact, today's wi-fi access points will automatically find channels to use. it works great. even if you have a neighbor underneath using or some other business on a floor below, there's ways of coordinating and making it work. right? but now, go to a wide-area situation. the premise of unlicensed at 600 megahertz is while you can build community networks that have, you know, a mile, five miles of coverage, well guess what? over that coverage area, if you have multiple operators, people trying to use that spectrum, it will be completely uncoordinated. there will be no way -- there aren't in any of the standards, and there are standards being developed for unlicensed use, those standards actually don't recognize the problem of

multiple service operators operating at the same time. so deploying, investing large amounts in a situation where you have no idea whether your network's going to function or not, doesn't make sense. and my view is that that spectrum might be used by wireless isps in rural areas, but in general is not going to see really efficient use. >> yeah, i was compared to a dinner gala event. >> i like those. >> you have -- when you have small groups of people having chitchats. that's unlicensed usage. because they're talking in low volume, among themselves, in a narrow area. the moment you have the designated speaker of the evening there needs to be somebody who will bring order to it so that people quiet down, and if they don't quiet down, that's called interference.

so that everybody is quiet and that you have the designated speaker speak. and then somebody has a question. they will get the microphone. so that is licensed usage where you have somebody bring order to it. and you can do that in wide areas. so licensed spectrum is most beneficial for wide areas. and unlicensed for small areas. >> to put a bow on the unlicensed spectrum segment, we -- i looked at the may, 2014, incentive or broadcaster's auction rules that came out, and it appears that they, depending upon how much spectrum they get back from the broadcasters, they're going to make a total of 14 to 28 megahertz of guard band spectrum available for unlicensed use. so that sounds like a minimum of 14. and it says in addition we'll

make an additional 6 megahertz of spectrum available by allowing unlicensed use of channel 37 at blah, blah, blah. my question for you is this the right allocation? i don't think that anyone is saying that there shouldn't be unlicensed spectrum. the question is how much and where should it be. isn't that really the debate? >> absolutely. i think consumers will be very disappointed with 14 or 20 megahertz of spectrum when they're used to wi-fi with 40, 60, 80, 160. they will say, you know, this is the slow train, you know. i'm not going to use that. there's something wrong with my equipment. and on top of it, there will be -- because it's 600 megahertz, you will have ranges of several miles. so somebody on the other part in town can very easily interfere with you, making it even slower. so if we wanted to unlicense spectrum, we should move it up in the spectrum dial, and go to,

you know -- we moved it to 5. i think if we go higher up, there's more spectrum available, and it's much more suitable for unlicensed usage. >> so i would like to separate the question of the band plan from the use of the band plan. the fcc had some very difficult problems in trying to figure out how to design its effectively contingent band plan based on how many broadcasters were going to show up and who was going to take an offer. which is why we're not seeing the static band plan that we're used to in this auction. and i think they've done a heroic job so far in trying to figure out how this is all going to work and fit together. the question, then, of how one uses either the due plex gap or the guard bands is a very difficult question. they have just released another notice of proposed rulemaking, looking at those technical questions and i know from the

vendor community, everybody's got that nprm under a microscope, because the most important thing that can happen out of this voluntary incentive auction is that it's a success. that the carriers show up, with their checkbooks, and purchase that spectrum. that enables the fcc to pay the broadcasters, fund firstnet, fund the u.s. treasury, and gives that tool a huge boost for future transitions of other bands. and that is the most important thing. so it's got -- people have got to walk in to that auction, particularly the forward auction, with the confidence that what they're buying is going to be usable by them. >> got it. peter, any other questions, any other comments on the unlicensed before i -- maybe it's time to go to the audience. did we knock out unlicensed to your satisfaction? i'm kind of -- >> i guess i'd just add -- >> he kind of rained on my free

broadband. >> back to mary's comment about neither super nor wi-fi. i think i used those same words in an article i wrote. i just want to mention the not wi-fi. the current wi-fi standards don't work in that band. what i-tripoli is looking at are entirely new standards. so no existing device is going to work in those bands. and i think it's instructive to look at where tv white spaces are getting the most usage today. it's not in the u.s. it's in places like africa, providing coverage to places where there is no broadband at all. and then using those low-frequencies is a fantastic way of providing say back haul to towns that don't have broadband, and then using that as a back hall connection for providing local wi-fi at higher frequencies. so there are use cases for the spectrum. i'm just not sure we'll ever be

a, kind of a viable alternative to the mobile broadband systems that we all enjoy today. >> all right. i think there was a question from the audience back here. i think you were waiting. go ahead. >> hi, my name is sarah, and i have perhaps what is a much less sophisticated question than what you all are talking about in terms of spectrum. but i have recently been accepted to a global start-up incubator program to launch a mobile application development company. specifically centered on health. and based on what i've heard today, and what i've read in the industry first on the positive side, i'm thrilled at the market potential. it's estimated to be about a $6 trillion industry going forward. having said that, i have a concern based on the interdependencies, what we're talking about in terms of infrastructure. and that is, that if i travel

from dulles airport to this location and use my mobile device, i have a couple of challenges. one round trip from here to dulles will drain my battery. and there is no way to charge that on the metro. the second concern is that i don't have reliable service in terms of video and app usage. and here we are in a very tech center. how do we, as capitalizing on, michael, what you referred to as both maximizing the investment, and the equity of consumers, feel comfortable capitalizing on this tremendous opportunity but understanding that our customer base is going to atrich if we can't provide the reliability and increase the power connection? >> let me answer your first question first, which is that you probably don't know but on the new silver line they have little power outlets.

no, no, not true! it's not true! that's not true. they should. we wish it was true, but it's not. okay. i wake up in the morning and my phone drains before i get in to work. if you think about health apps. health is a high value use, especially if you're in monitoring, in realtime, people's condition. and it's exactly the sort of high value use that you could imagine being prioritized. so this is where the different pieces come in. if you have a high value use that can be prioritized, and paid at a higher rate, then you can end up being able to fund the infrastructure in a way that provides more coverage. so you ask yourself the question, what would you need to sort of make sure that -- that

your health app had a sufficient connection in every point? and you're talking about investing a lot of money, and continuing to invest a lot of money over time. where we run a risk at this point is that policy ends up constraining the ability to identify high value uses and direct the money in that way. you can almost imagine and i'm not saying that this would happen. you could almost imagine that places like washington, new york and so forth, would have a way of health-related apps in realtime, that is not the sort of ones where you sort of do fitness, but ones that are directly connected to people's health would have priority, and do it in a way that gets funded in a different way. so where we're talking about business models here. business models is not an

abstract word that says oh, some people make money and some people don't. it has to do with what sort of services you can deliver to consumers in a way that works. >> i'm very grateful for the question, because when we apply net neutrality to mobile where we have a constrained environment, you know, net neutrality in its purest sense, everybody should be treated the same way, your -- your potential customer, somebody who has medical monitoring gets treated exactly the same way as somebody whose downloading a youtube video. and they're -- you're not allowed to prioritize somebody with a hot monitor over somebody who plays a game. and so because all usage is supposed to be exactly the same way. this doesn't really allow for your health initiatives to be -- to be flourishing when you

compete with somebody, you know, more entertainment usage, rather than life critical applications. so this is, i think, a very good example of where we should really let the marketplace decide. because i'm sure somebody with a heart condition will put a higher premium on band width than somebody playing, you know, words with friends. >> i just want to add one more thing here. in the interest of fairness, this is one place where the fcc actually has to be fairly active in terms of making sure that there isn't oppression of small start-ups by larger companies. so there's two things going on. one is that the ability to create high-reliability channels for health apps and other things is extremely important. but it has to allow that small start-ups should have a fair shot, as well.

and when we -- when hal talks about what sorts of rules you need to have in order to make sure that that's true, this is exactly what he's talking about. that you should be able to get in to the marketplace and not feel like you're being squeezed out by large providers. >> if there are no pending questions, i'd like to -- oh, sorry, stan besson. >> the metro, not the communications system, as a regular red line rider, that's where the problem is. >> with why her cell phone -- let me move to another topic that's near and dear to my heart. which is wireless wire line substitution. and the first question is for mary. you know, some folks are trading in their wire line connections for wireless ones.

in october 2011, cisco, your firm, mary, estimated that up to 15% of u.s. consumers could cut their broadband wire line connection in favor of a mobile data connection by 2016. and more recently, in a 2013 pew survey, we found that one-third of cell internet users use mostly their phone to access the internet, as opposed to other devices like a desk top, laptop, or tablet computer. what is stopping more folks, mary, from making the plunge and going pure wireless? >> well, i think the 2011 study sort of identified from a -- let me just say, that's sort of a tops-down study. an estimate, if you will, of what could happen. right? and the point of the study was really to say that the wire line providers, you need to put wi-fi at the edge of your network to try to make your offering more

sticky. so, in full disclosure, that was what was going on in 2011. but it did identify some useful trends. i mean, there are categories of consumers who are probably not going to cut their wire line connection. a family that's got multiple people in their family using broadband connectivity is probably going to want that wire line connection. there are people for whom there may be coverage issues. they don't get the coverage in their home that they would like to have, or it's spotty. and whatnot. but there are a category of customers, and the study, the study we produced, and the pew numbers bear it out, where mobile is the compelling choice. they might be you know, one-person household who is mobile. they're renters. they move around a lot. they don't want to mess with broadband. might be a rural household for

whom there's no real wire line comparable coverage. and that still remains the case today, despite all of our -- all of our efforts to fund universal service and change that to a broadband plan. so there is a component of the consumer marketplace that's eligible for this sort of thing. and i think we're still early days in terms of figuring out how large that's going to grow. >> i think going mobile, and using mobile spectrum for internet usage makes a lot of sense in the rural parts of this country. where, you know, we're always talking about we have a spectrum crunch in this country. which is true in the major metropolitan areas. at the same time what is also true is that in a lot of our plains states we actually have a glut of spectrum.

because, their population density is very low. so -- and the distances that we need to cover is very far. you know, i've just been working with a small rural council and some of their customers are miles and miles out. right now, they're trying to serve them with dsl, and as we all know, dsl punishes you severely for how far you are away from a central office. and the best way for them to actually serve that customer would be wirelessly. because we can put 20 megahertz, if not more, to that customer. and then only five or ten, you know, if you're in rural kansas or south dakota, where the -- the boom hasn't hit yet. you know you have a handful of customers sharing a cell. you know, and the cell with 20 megahertz can do up to 150 pleg ga bits a second.

you know, that's something you can't dream of providing that, you know, dsl or even fiber because the cost is simply prohibitive. so providing these customers in the rural parts with wireless service would be the best solution for consumers, and for the providers alike. >> and roger brings up a great point and let me just amend my response to earlier. from a technology perspective, we're early days on 4g. we're about to move to 4g advance. there's conversation in the industry about what is a 5g technology look like. we're starting to get to the point where these wireless technologies are really delivering very, very substantial through-put. so, again, as those technologies roll out into the marketplace and become available, it becomes a lot more compelling, particularly in these kinds of situations. >> yeah, especially when only a few people actually share it. you know, when -- when less

people than in this room actually share the band width of a cell, the through-put is -- is delightful. you know, it's what -- >> it's absolutely -- >> it's what you expect from a fiber connection. it's just that in washington, in new york, in silicon valley, we have so many people trying to use the same spectrum that we have that crunch. >> peter? >> yeah, i'd like to add, i think we've made unbelievable progress. i've been involved with wireless technology for 20 years now. and you know, lte networks are 1,000 times faster than the cellular digital package network i worked with 20 years ago. but, you know, we still have a long way to go. mobile broadband's at a point, comment was just made, if it's not heavily used, i'm lucky enough that i have an office, remote office in a rural area which happens to have lte. so when i'm there, i just use my

phone as a hot spot, and my family shared plan is sufficient for me to run my business off my phone. that's my broadband connection. the tough part today is cutting the cord to your tv, and getting all your entertainment by hulu, netflix, et cetera, and cutting the cord to your broadband connection, because the two sort of add up to a disastrous situation. the fact is, we consume, when you're watching netflix and higher definition, you're running -- you're consuming about a gigabyte per hour. so you're going to go through whatever broadband plan you have fairly quickly. but, that's going to change. the capacity increases that we anticipate with, you know, lte advance, with small cells, ultimately with use of millimeter wave and 5g all those developments will keep augmenting capacity.

so to mary's point that just right now it's a subset of people who can be served by wireless broadband only, that percentage is going to keep increasing. wireless is never going to replace fiber, but whereas it's only maybe 15 or 20% of people that can be served by wireless now, i'd say by the end of the decade it might be twice that, and then five years after that maybe, you know, twice again. it's hard to predict exactly but the trend is very positive. >> i think that -- oh. >> i think business models, you know, if we have a regulatory environment that lets us use the right technology in the right scenario, and that is, for example, wireless in rural america, as an equivalent to wire line service, that will allow operators to adopt and to adapt a business model that they

don't have to provide the same type of pricing, and the same type of bundles that you have in a mobile environment that includes urban areas in a largely fixed or in a fixed environment in rural america. so i think, you know, if we have the right regulatory environment, these problems will actually go away. and everybody wins. >> let me just add one more thing to that. if we're thinking about where people locate in the u.s. rural versus urban, the ability to offer different types of access in the rural areas, or the ex-urban areas, may have a large social benefit in terms of spreading people out to lower cost areas. if you think of one of the things that we think about at ppi is the larger economic development policies in terms of cities, versus rural areas. i think it's important that in

an era where wireless is essential, that we allow the pricing plans to adapt, as well. >> let me now bring this back to some concrete policy issues, because i think that how you perceive wireless and wire line, is it a complement or is it a substitute, can influence your answer to a lot of key policy issues. i'll just point out that my dear friend susan crawford wants us to see them as strict complements, right? and that drives a lot of her world view and how she, you know, how she comes up with policy. but it sounds to me from this panel that while it might not be a perfect substitute today, there's a lot of substitution going on in the margin, and it could be an even better substitute in the future. so with that windup, let me just ask some concrete policy questions. roger, you have a piece out that talks about how the fcc should

carve up the spectrum when it goes to sell it in the broadcaster auction, right? and you say, to quote you, to regain its lead the united states should quickly allocate more license spectrum to wireless operators, comma, in larger contiguous blocks, end quote. i'm going to hold you to that. what now when i was reading that it sounds to me that if you had your way, it would make life at the margin more difficult for smaller wireless carriers. after all, if the blocs were in teeny, tiny slices that would allow for greater opportunities for smaller folks. you know, whenever i have a choice between choosing like my local coffee vendor or starbucks, i always go with the small local guy. have you got something against the small wireless carriers? >> not at all. but i'm actually a big fan of smaller telecom providers in general. because, you know, i call them, you know, they're on the

proverbial bicycle and they're going up against the big carrier on a steam roller. and if a small carrier gets rolled over by a steam roller, you know, they did something wrong. i think there's an important part for small providers, but we also have to recognize that, you know, the small rural providers have 3% market share. and where they're operating, there is a glut of spectrum. so, on top of it, you know, i think it's a very laudable goal by the fcc to protect them. but, you can't eat the cake and have it at the same time. you can't be -- you can't have the fastest possible internet in the world and carve it up in small pieces. it doesn't work. so there's room, and there is a necessary protection for the 3%

in this country. but, for the 97% of consumers that are working with the larger wireless carriers, we need to use it in larger spectrum. you know. for example, in switzerland the swiss regulator carved it up in 20 and 40 megahertz paired spectrum. they've just started with spectrum allocation with carrier aggregation where, you know, they're offering 300 mega bit per second download speeds. if you like here in the united states the biggest spectrum band where you have contiguous spectrum is the 1900-c block where it's 15 megahertz paired, you're not coming anywhere near, even if you add on another ten megahertz paired suppose of spectrum.

so if we want to -- if we're actually serious about having the world's fastest internet service, wireless internet service, we can't do anything but have large services. if not, we have to make -- we should make the conscious decision that we value competition over raw speed. that's a very valid decision. but you can't have the cake and eat it at the same time. >> mike, i'd like you actually to weigh in here from an economic perspective. because what i see happening is that if wireless is becoming more and more of a substitute for wire line over time, and people are going to start using wireless, leaning on wireless to do their heavy demand, heavy capacity demanding apps, like video, it seems to me that that's going to push out the benefits of having a larger network, all things equal and i'm just wondering, should this inform, or how should it inform the fcc when it comes to

figuring out the number of carriers in any market or how to carve up the spectrum? >> i think the word that you used before was on the margin. i think that's an important word. because what happens is, is that even if you don't cut the cord completely, the wireless still provides competition on the margin. because if what you have is the ability to sort of use the wireless some of the time so you don't have to break your data cap, okay, because i know that i shift back and forth almost seamlessly between using my wired broadband and my wireless, depending on what's happening. so, in terms of your original question about, does it provide competition, the answer is that it does. we should think about it as providing competition. even if we don't cut the cord completely. >> well, let me get peter to weigh in from an engineering perspective. i mean, if what i'm poseating is true, and the economies of scale and wireless are just going to be so large that it's going to

be very difficult for a small player to compete, what role is left for the small wireless guys? is there still something constructive for them to do from an engineering perspective? >> well certainly if you're trying to deploy a national network, it today requires many, many billions of dollars of investment. you know, i certainly think in rural areas or less developed areas, there are opportunities. i happen to live in oregon, and the columbia river gorge, and we have a very innovative wireless -- internet service provider called gorge.net, of course. and they've been using wireless forever. and whatever new wireless technology comes along, they're all over it, because there's a lot of people that can only be served by wireless. so that's one example. there's probably others. >> absolutely. you know, there is an important

place for smaller carriers. and it's predominantly outside the major metropolitan areas where you have, unfortunately, huge economies of scale. and where if you want to have a, you know, it's very laudable that we are helping with designated entities. but we also have to recognize that building a nationwide network $5 billion, $10 billion. how a small family owned business can raise that amount of money is a little bit difficult to grasp. so we have very laudable social policy goals that are in direct conflict with economic reality. >> last question on wireless aud yoen line. mary, you have a new 2016 mobile vni report out and cisco is projecting mobile data traffic

to grow from 0.4 exabytes per month to 2.7 exabytes. an eight-fold increase. i don't even know what an exabyte is. >> big. big. >> what's driving all this demand and could it be substitution from wire line connections? >> the main drivers of demand that we're seeing are as follows. one is screen size. our devices are getting bigger. i'm going to go out this afternoon and get one of those new apple devices that is bigger than my old apple device. we've embraced tablets. as well as smartphones. and so because we're consuming so much video, as roger pointed out, that's a lot more bits of data that are moving over these mobile networks. just because of screen size and video.

so explosion of tablets, explosion of smartphones. the tablets themselves are getting much more processing power. we're projecting on a monthly basis a tablet today is consuming on average about 1.4 giga bits of data a month and in 2018 that's going to jump to 5.6 gigabits a month. these things are becoming as powerful or more powerful than laptops. and then the number of connections is growing, as well. it's not just people anymore. it's machines. it's the internet of things that's happening to us. all those things are really driving demand. i mean i think the substitution effect is in there somewhere but it's probably not the primary mover at this point of what's going on with the explosion in data demand. >> yeah, it's a little interesting tidbit. every inch your screen size goes up, your data consumption

doubles. >> and then this also -- >> wow. why is that? maybe from an engineering perspective? >> because it's so much more enjoyable user experience. >> ah. okay. >> and the number of pixels on the screen goes up, and so that really drives it. you're much more likely to watch a movie on a five inch device than a one inch or two inch device. >> i think that's exactly right. it's not just in addition to screen size, it's also the resolution. when apple came out with their retina display, which everybody now has matched, what they meant was that there are more pixels than your eyes were able to -- you couldn't see the individual pixels anymore. meaning the screen had better resolution than your eyeballs did. and so the retina display quadrupled the number of pixels and now we're seeing it also with 4k displays.

a 4k display has four times the resolution of a standard hd display. fortunately they'll be accomp y accompanied by better compression. so the band width requirement will only double instead of quadruple. but it's still doubling. right? >> let me just add something, the word requirement is actually a little bit funny there. because, there's an interplay between demand and supply here that just because your screen demands that many pixels doesn't mean that you're going to get them from your wireless connection. >> right. >> right. so you could easily imagine a situation as the business models evolve where, and this goes down to the -- to where we were talking about earlier, where what you contract for at a lower price is lower resolution data coming on to your screen. you may not want to. that's why -- we're at this odd time where yes, the demand --

the devices are demanding that much. but it's not really a requirement. and so, the -- when these data forecasts have built in to them certain assumptions about what is going to happen in the marketplace, which is constrained by capacity by regulation and by price. >> yeah, just to echo that, doesn't really make sense for me to consume hd video on my five inch phone. because i can't really see the difference between that and video at one quarter the resolution. so if i had -- >> if we had watches we could be looking at our one inch screens. >> that goes back to my previous point, why not have the flexibility now in service plans where i could have a discounted plan which automatically transports video to a coarser

resolution which i might not even be able to tell the difference. >> i think this is a deeply important policy point here. is where the policy and the technology and the economics intersect, and every time somebody on the panel says, we're at an early stage, that's what they mean. is that we don't actually know where in the intersection we want to be in the end. and we have to allow more flexibility to sort of find out where the sweet spot or the sweet spots are. >> where it goes up. we're the flat piece. at one point in time with the right policies in place, with the right incentives in place, like business models it will go up dramatically. >> well, let me go back to the audience and see if we have any questions before my next set of topics which is going to be international comparisons as a preview. is anybody waiting with questions?

all right. then let's march forward. i want to go back, mary, to your latest cisco mobile vni study. and it shows that 4g connections are expected to overtake 3g connections in the u.s. around 2016. but 3g won't surpass 4g in europe even by 2018. and i was really confused about this. i thought that the u.s. should be looking to europe for how to design its wireless ecosystem. what's going on here? do they have a problem? >> well, and it's not just europe, it's really the rest of the world. the rest of the world lives, for now, in 2g or 3g land. and one of the things we've done uniquely here, and again industry policymakers take credit for this is we've made spectrum available that has enabled our carriers to move to 4g. and to get those networks built out. in a way that other countries are lagging. i mean we did the 700 megahertz

digital television transition. we were the first in the world on that and other countries are playing catch-up. so these kind of advances, the flexible licensing approach that roger smerman talked about earlier today these all enabled the carriers to move to 4g in a rapid way, and we have benefited from that. we've got the first broad scale deployment. we're going to be the first country that moves to 4g advanced technologies. we have from a vendor community perspective, we have driven development jobs into this country. every major vendor, regardless of the nationality of their headquarters, does their 4g development here in the u.s. so it's been a tremendous benefit to the u.s. to use spectrum policy to drive ahead and be the world leader right now. and it would be nice if we can continue to do that.

>> and it would be nice if we recognized that this is job creating. that being a leader in 4g produces jobs in the u.s. >> we also have to give the american carriers actually credit. because in this country, what we take for granted is the exception, not the rule. when you are buying wireless service, you're paying the same amount if you are on 2g, or 3g, 4g, connection. because the wireless carriers want you to have the best possible user experience, and that is actually the most advanced. in other countries, in europe, in the uk for example, three out of the four carriers charge a premium for 4g. you have to pay somewhere between 5 and 10 pounds, you know, 8 to 15 dollars extra a

month, to 4g service. when the smallest carrier three, called three, in the uk, offer ed 4g service for the same price as 3g, you know, the other carriers accused them of devaluing the product. rather than, you know, realizing the great advantage consumers have, and the carrier actually has, too, because the price per bit goes down. if you go to continental europe, in here, you know, you get -- doesn't matter how big your bucket is, you get the fastest speed. for example in germany, the bigger the bucket you have, the faster the download speed they give you. so, usage like that you know is also by the way an explanation

why sometimes that average data speeds are faster. because they are artificially limiting the access to the -- to the 4g networks. so the average speed goes up, whereas -- which is if we take all the speeds, divide it by the number of people, is the average speed. whereas in the united states, the median speed, which is actually what gets the 50th out of 100 people is actually higher. because we give -- we approach wireless in a much more democratic way. and a much more egalitarian way, than the people in europe. and the carriers in europe. >> let me -- you have a new study on these international comparisons. and i got some amazing stats in there. many of which make the u.s. look pretty awesome.

but let me talk about two in particular. one, you said that the u.s. used to lead the world in wireless download speeds. that's the good news. but we have been overtaken recently by canada, japan and france. i can understand losing out to canada and japan but i just don't understand the france thing. that's just embarrassing. what's the root of this loss in speed leadership? and how can we get it back? >> well the root of it is spectrum allocation. and spectrum sizes. they have made larger bits of -- larger pieces of spectrum available for 4g. and we have to cobble it together, you know, where through pure happenstance, a wireless carrier can get 20 megahertz of continuous spectrum together. the speeds are comparable. but it's not working everywhere. because in europe, you buy the spectrum nationwide.

and you have one block. here, you know, wireless spectrum is divided in 437, no joke. 437 little slivers of spectrum, and they're connected -- and they're put together in different ways, and with the cellular spectrum. in the pcs spectrum it's 100 and something. so having contiguous spectrum on a nationwide basis is extremely difficult for a u.s. carrier and it's a trivial task for carriers everywhere else in the world. and so that's -- that's part of the answer. >> one other stat unless you guys want to weigh in that struck me from your report is about how much more the u.s. wireless operators are investing relative to their peers. this is -- this really was impressive. according to your calculations you're looking at wireless cap-x and you say that we're at about

$109 per inhabitant in the u.s. versus $55 per inhabitant in the european union. i was like, go america. that was really exciting. >> yeah. >> now can you -- can you attribute this difference in cap-x to any particular policy differences across? or is there just too many things changing that would confound that analysis? >> the most significant policy difference is that in the united states, wireless carrier can use whatever -- whatever technology they want on whatever spectrum they have. and that allows significant flexibility for the carrier. and they can mix and match. in europe, when you have -- and this changed now in a few countries. but previously to this round, you bought spectrum for a specific technology. and if the markets said i don't

want 2g service anymore, i want 3g and 4g, the carrier had to say, i'm sorry, the government tells me i can only give you 2g service on this spectrum. and this is really inhibiting the market, market development, investment, and, you know, the welfare of the entire country. >> will, go ahead. >> so this question -- will reiner with american action forum. this question is for roger. you mentioned the difference between the united states and the uk in the 4g/3g space. i was wondering if you could talk a little about the 3g auctions that the uk actually had. i know there was a huge issue with these auctions they came in like 22 billion or 23 billion pounds, the projection was 23 billion or 24 billion pounds. it was about 3 to 4 billion pounds for last year's 3g auction that they had.

i'm just wondering the auction rules, the setup if that had any effect on how the service is deployed, and kind of the many many people actually criticized the 3g auctions in the uk for being kind of botched. i'm just wondering if you have opinions on this? if you think one way or the other? and how that's kind of affected adoption within the uk? >> i think, you know, what we see and saw with the 4g auctions was actually a lot of really bad hangover from the 3g auctions. where you know, the european carriers went really crazy, and spent tremendous amount of money. and then to certain extent botched it themselves by, you know, adopting a very metered approach, and rather than stimulated usage like the u.s. carriers, i remember having worked for a european company at

that time, and our system -- and that was, you know, 2000 -- when did i work for them, late '90s, almost 2000, when we were like chastised for using when we were like chastised for using our wireless connection to download silly things like powerpoint presentations. because the cost was so prohibitive. i think this hangover and the very slow adoption is what actually diminished the value of the auctions. >> are there any other questions out there? we are getting close to the top of the hour. >> thank you. this has been a varitable seminar. i would like to ask the panel to

comment on how we maintain the leadership that we talked about. what are the two most urgent things you would ask or implore to do or not to do in order to speed us on the road to 5 g and beyond? >> i think -- i will start with it. i think we can all agree that we need more spectrum because spectrum is the fuel that drives this engine. and the other thing is maintaining a light touch environment that has benefitted us so greatly over the last 30 years. and now that things are working so well we are trying to change the formula. and i would greatly caution from doing that. >> to which i would add resist

temptation to take a snapshot of today's arct and consider it static. this is hard that markets are ditammic, technology is dynamic. everything is moving and changing. the north star should really be are consumers going to benefit or be harmed. resist the temptation to take a snapshot. make the voluntary incentive option a big success. >> i think that what you say about not focusing on this being a static market, that this is the early days. as you know one of the projects we have going on at ppi is a 15-care15 15-year look at the wireless market. and this is comparable to what laying out a road map 15 y does

years out. unless you start thinking about in 15 year terms you stop thinking about the market being static, you start thinking about all of the different business models and different possible uses and you realize it puts more weight on the investment. it puts more weight on the flexibility and it puts less weight on what's happening in the market right now. so having a longer timeframe which emphasizes the dynamism is extremely important. >> peter, you are going to get the last word if you can tell chairman wheeler one thing what would it be? >> one thing? >> well, i would say encourage innovation. do not put up barriers that will make application developers trying to do creative

applications. don't put up barriers that make them think twice about investing in this market place. >> great. i want to thank everybody for coming. i'm going to wrap it up. this has been a lot of fun. we will see if i get invited back. thanks to ppi for hosting us. thanks for coming and let's give the panelists a nice round of applause. [ applause ] .

c-span's 2014 coverage continues with cory booker and republican jeff bell. after recent polling listed the race a solid democrat. you can watch it at 8:00 p.m. eastern on c-span. on wednesday the louisiana senate debate between mary landrieu and republican congressman bill cassidy and retired colonel rob manus. all candidates run for office against each other with the majority winning the election. you can watch wednesday's debate live at 8:00 p.m. eastern on c-span. you can post your comments on facebook and twitter. right after that a maine senate debate between susan collins and shanna bellows. that starts at 9:00 p.m. eastern also on c-span.

the 2015 c-span student cam video competition is underway open to students to create a documentary on the theme the three branches and you showing how action has affected you or your community. there are 200 cash prizes for students and teachers totaling $100,000. for the list of rules and how to get started go to studentcam.org. next remarks at a u.s. african summit hosted in august by the barack obama administration. this is about 20 minutes.

>> good morning, everyone. i wanted to thank president obama and penny pristger to host this ground breaking event. with over 200 corporations and 50 african countries represented here, this gathering really does represent a new approach to economic development in africa and a new moment in u.s.-african relations. since the dawn of africa's independence movement, america's relationship with the continent has depended ongd world aid, that part of our relationship still is vitally important. but africa has now developed into a global economic force, and so our relationship must evolve and mature. and that is the purpose of this forum, to recast our relationship as a full, equal and advanced economic partnership, a partnership that holds as much promise for african countries as it does for america. we have the people in this room to make that partnership a success.

so to start off the morning, i would like to invite all of you to take a few seconds to introduce yourself to the person next to you, or someone you have not met yet. >> we can go on with this, this is doing exactly what we want to do. as we all know, as we all know, whether it's in our families, or our businesses or our countries,

relationships are what matters and that's the whole idea here today is to get to know each other, to develop contacts and to show our mutual respect of one for another. and thank you, thank you clearly there's a lot to talk about. and there will be more opportunities to continuing our conversations, there is so much to discuss, because africa is today's biggest market opportunity in the global economy. and if you think i'm kidding, just look at the numbers, africa is expected to reach an overall 5% growth rate by 2018, it boasted six of the ten fastest growing economies. it registered more than 400,000 new companies in the last year alone. and it's middle class or consumer class is the fastest agreeing in the world. the fact is, africa is no longer emerging, it is here now. as africa begins a new stage in its journey, we in america want to walk by its side.